Preferred provider organization (PPO) - Health, United States (2024)

FAQs

What is a preferred provider organization PPO? ›

Preferred Provider Organizations (PPOs)

A PPO has a network (or group) of preferred providers. You pay less if you go to these providers. Preferred providers are also called in-network providers. With a PPO, you can go to a doctor or hospital that is not on the preferred provider list.

PPO, meaning “preferred provider organization,” refers to its network of contracted PPO providers. Think of the plan's preferred providers as those who can offer care at the lowest out-of-pocket cost (compared to out-of-network providers).

PPOs also tend to have larger networks than HMOs. The broad range of healthcare providers within a PPO network ensures a higher likelihood that the preferred doctor or hospital is in-network, reducing costs and facilitating convenient and familiar care.

Preferred provider organizations (PPOs) are groups of doctors and hospitals that contract with an insurer to provide medical services at a prearranged cost, thus allowing insureds to choose among these groups. HMOs may provide supplemental health care services.

What Are Disadvantages of PPO Plans? PPO plans tend to be more expensive than other managed-care options. They typically have higher monthly premiums and out-of-pocket costs, like deductibles.

Benefits of PPO health insurance plans

While PPOs offer the greatest savings when you use in-network providers, they also provide the option to receive care from out-of-network providers at a higher cost, giving you the freedom to choose the best care for your situation.

Generally speaking, an HMO might make sense if lower costs are most important and if you don't mind using a PCP to manage your care. A PPO may be better if you already have a doctor or medical team that you want to keep but doesn't belong to your plan network.

PPOs Usually Win on Choice and Flexibility

A PPO network will likely be larger, giving you a greater selection of in-network doctors, specialists, and facilities to choose from. Additionally, PPOs will generally have some coverage for out-of-network providers, should you want or need to see one.

Preferred provider organization (PPO) A type of medical plan in which coverage is provided to participants through a network of selected health care providers, such as hospitals and physicians.

What is a characteristic of a preferred provider organization PPOs? ›

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

For example, a plan might pay 80% of the cost of a visit to a preferred provider (after you meet your deductible), but only pay 70% if your provider is out-of-network. These percentages vary by plan and are outlined in your summary of benefits.

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.

One of the biggest advantages of PPO policies is their flexibility. Given that PPO plans offer a larger network of doctors and hospitals, you have a lot of say in where and from whom you get your care. Any doctor and healthcare facility within your insurance company's network offers the same in-network price.

A provider who has a contract with your health insurer or plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers.

Preferred provider organization (PPO) A type of medical plan in which coverage is provided to participants through a network of selected health care providers, such as hospitals and physicians. Enrollees may seek care outside the network but pay a greater percentage of the cost of coverage than within the network.

HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.